Let’s be civil. The Flathead Beacon encourages vigorous discussion and lively debate, but we will delete comments that attack other readers, make accusations we can’t verify, stray too far off topic, criticize local businesses (call them if you have a problem), convict someone of a crime, use profanity or are simply judged to be in bad taste. We don’t always have someone moderating comments, so we ask for your help: If you see a comment that violates these ground rules, or you simply deem it offensive, please e-mail editor [at] flatheadbeacon.com. The views expressed in the comments section do not reflect those of the Beacon.
By Carl on 10-09-08
Guess we’ll have to get our timber from Canada.
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By Matthew Koehler on 10-23-08
Recent turmoil shows a new economic model needed
By Matthew Koehler
Missoulian, October 6, 2008
Over the years, there have been plenty of proverbial canaries in the coal mine who repeatedly warned about a looming economic crisis, a virtual perfect storm that would be equal parts over-consumption, unsustainable development, deregulation, “free trade” and irresponsibility on the part of corporations and consumers.
If the sobering economic headlines of the past few weeks teach us one thing it should be that much of our current economic system is significantly flawed and that a new economic model - based on the principles of sustainability and local and regional self-sufficiency - is desperately needed.
Fortunately, Montana is in a unique position to lead this effort towards greater sustainability. A future where local farmers and ranchers grow our food, Montana workers produce clean and green energy for our homes and the ingenuity of our businesses combines with the skills of our workforce to protect and restore the environment, while also producing locally-made products that enhance the quality of our lives.
Locally, we’ve witnessed the timber industry hit particularly hard by the economic crisis with recent announcements of closures, curtailments and lay-offs. As tough as this news has been, it’s not entirely unexpected since the industry is inextricably tied to the housing and credit sectors of our economy. After all, we’re experiencing the worst housing slump since the Great Depression and the steepest decline in lumber consumption ever.
For example, when Plum Creek laid off nearly fifty workers in the Flathead, their vice president told the Missoulian, “Market prices are depressed and don’t currently cover the costs of production.“
Last week, as Tricon Timber in Mineral County laid off forty-five, the Missoulian article opened with, “No one’s buying what Tricon Timber of St. Regis has to sell.“ Equally as blunt, was Tricon’s president as he told the Clark Fork Chronicle, “We are getting to the point where we’re not getting any offers [for our products].“
Compounding the problem, the industry is currently getting only 42% for their dimensional lumber compared with prices four short years ago, while diesel fuel costs have risen 250% during a similar time period.
Understandably, people are concerned and there is a natural inclination to “do something.“ The past few years have seen an increase in collaborative efforts that have brought together diverse interests, including the WildWest Institute, to find common ground on bona-fide restoration and fuel reduction projects. While much work remains to be accomplished, to date agreements have been reached on a set of statewide Restoration Principles (http://www.montanarestoration.org) and collaborative projects are under way across the state.
Unfortunately, outside of these successful and emerging collaborative efforts, there is an aggressive effort behind the scenes to “bail out” the timber industry with an ill-conceived initiative divorced from economic reality and any concept of sustainability.
Led by the Missoula Area Economic Development Corporation, this initiative is based entirely - and, up to this point, only - on a “wish list” that was put together by the timber industry.
The basic premise of MAEDC’s initiative, which in August was given to state officials, legislators and the Montana Congressional delegation, can be summed up simply: Log Baby Log. The initiative calls for “immediate action” to increase national forest logging by 330%, double state land logging and a bizarre plan for the state to seize control of a million acres of national forests, purportedly for even more logging.
But wait. There’s more. Montana taxpayers are being asked to foot the bill for timber industry exemptions from fuel taxes, discounts for vehicle registration and a taxpayer-supported program to pave log yards. One state legislator has even drafted legislation giving the entire timber industry a two-year tax holiday. Sorry, but does Plum Creek really need tax breaks paid for by hard-working Montanans?
If we are going to “bail out” the timber industry, shouldn’t Montanans at least demand that any taxpayer dollars go towards efforts that truly put the industry on a path towards economic and ecological sustainability?
For those interested in a more detailed discussion of what this path might look like, the Montana Community Development Corporation’s well-researched and well-reasoned “A New Business Plan: Moving Forest Businesses to Long Term Environmental and Economic Sustainability” should be required reading.
The WildWest Institute supports sustainable economic development in Montana and has been actively promoting some of our solutions. For example, let’s work together to ensure that every home and business built in Montana is made out of Montana wood products. After all, this would help solve some market issues, while also reducing costs - and greenhouse gases - from shipping products around the country.
Or how about collecting construction waste, which is currently dumped in our landfills, for use in high-efficiency biomass boilers? Or developing businesses that would use sustainably harvested blue-stain pine for locally made cabinets, furniture and wainscoting?
I’m confident that if we work together we will find solutions. That’s why I would encourage all Montanans to keep their eyes and ears on Helena during the upcoming legislative session. Touch base with your elected officials and demand they work together on sustainable solutions that will benefit our state’s economy, workers and environment.
Matthew Koehler is executive director of the WildWest Institute. You can learn more at: http://www.wildwestinstitute.
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By Matthew Koehler on 10-24-08
Below are snips from the AP article “Lumber industry threatened by glut of unsold homes,“ which is obviously related to this article above. The entire article is available at: http://biz.yahoo.com/ap/081023/lumber_struggles.html?.v=1
Lumber industry threatened by glut of unsold homes
Thursday October 23, 2008
By Timothy R. Brown, Associated Press Writer
JACKSON, Miss. (AP)—The glut of homes in foreclosure, vacant, or stuck on the market has the nation’s lumber industry hanging on by a limb.
Since housing starts hit their peak in mid-2005, demand for lumber used in floors, home frames, and cabinets has declined sharply, and experts say the number of unsold homes would need to significantly decrease before homebuilders commit to building new ones.
Glenn Hughes, a forestry expert with the Mississippi State University Extension Service, said many loggers are faced with difficult decisions. A global economic slowdown, tight credit, and the housing bust are hitting sawmills hard and shutting down logging companies.
“Boy, surviving this downturn. I have talked to a lot of people who have been in the business for many, many, years—this is probably the roughest they have seen it,“ Hughes said.
The brutal economics of the housing crisis don’t appear to be letting up, continuing to drag down demand for both hardwood lumber, for floors and cabinets, and softwood, used in home frames.
Even if home buyers miraculously returned to the market to purchase unsold homes, Al Schuler, a research economist with the USDA Forest Service, says it may be a little too late to lift up the lumber industry because the inventory of unsold homes is “a huge number.“
“We are going to be building smaller houses. We are going to see lot more 2,000 square-foot homes rather than 5,000 square foot,“ he said.
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By Matthew Koehler on 10-29-08
Below are snips from the Western Wood Products Association’s article title “U.S. Financial Crisis Will Delay Recovery of Housing, Lumber Markets until 2010”
PORTLAND, Ore., Oct 21, 2008 (BUSINESS WIRE)—The historic downturn in lumber demand will likely extend another year until the American financial system and housing market can be repaired, according to a new lumber supply and demand forecast from Western Wood Products Association.
According to the lumber trade association, lumber demand is expected to drop 15 percent to 44.3 billion board feet this year, then fall another 3 percent to 43 billion board feet in 2009. In just three years, demand for lumber has plummeted by some 20 billion board feet—more than what Western mills produced in all of 2005.
Housing starts are forecast to reach just 993,000 in 2008 and decline again to 933,000 next year. Since new housing typically accounts for more than 40 percent of annual lumber demand, the more than 50 percent decline in starts from 2005 has been a body blow to lumber mills.
The volume of lumber used in new home construction is expected to total 11.8 billion board feet in 2008—less than half of the 23.3 billion board feet used just two years earlier.
The WWPA forecast calls for housing markets and lumber demand to grow in 2010, but cautions that any recovery will be slow.
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Comments on: As Markets Decline, Timber Industry Hangs On
Let’s be civil. The Flathead Beacon encourages vigorous discussion and lively debate, but we will delete comments that attack other readers, make accusations we can’t verify, stray too far off topic, criticize local businesses (call them if you have a problem), convict someone of a crime, use profanity or are simply judged to be in bad taste. We don’t always have someone moderating comments, so we ask for your help: If you see a comment that violates these ground rules, or you simply deem it offensive, please e-mail editor [at] flatheadbeacon.com. The views expressed in the comments section do not reflect those of the Beacon.
By Carl on 10-09-08
Guess we’ll have to get our timber from Canada.
By Matthew Koehler on 10-23-08
Recent turmoil shows a new economic model needed
By Matthew Koehler
Missoulian, October 6, 2008
Over the years, there have been plenty of proverbial canaries in the coal mine who repeatedly warned about a looming economic crisis, a virtual perfect storm that would be equal parts over-consumption, unsustainable development, deregulation, “free trade” and irresponsibility on the part of corporations and consumers.
If the sobering economic headlines of the past few weeks teach us one thing it should be that much of our current economic system is significantly flawed and that a new economic model - based on the principles of sustainability and local and regional self-sufficiency - is desperately needed.
Fortunately, Montana is in a unique position to lead this effort towards greater sustainability. A future where local farmers and ranchers grow our food, Montana workers produce clean and green energy for our homes and the ingenuity of our businesses combines with the skills of our workforce to protect and restore the environment, while also producing locally-made products that enhance the quality of our lives.
Locally, we’ve witnessed the timber industry hit particularly hard by the economic crisis with recent announcements of closures, curtailments and lay-offs. As tough as this news has been, it’s not entirely unexpected since the industry is inextricably tied to the housing and credit sectors of our economy. After all, we’re experiencing the worst housing slump since the Great Depression and the steepest decline in lumber consumption ever.
For example, when Plum Creek laid off nearly fifty workers in the Flathead, their vice president told the Missoulian, “Market prices are depressed and don’t currently cover the costs of production.“
Last week, as Tricon Timber in Mineral County laid off forty-five, the Missoulian article opened with, “No one’s buying what Tricon Timber of St. Regis has to sell.“ Equally as blunt, was Tricon’s president as he told the Clark Fork Chronicle, “We are getting to the point where we’re not getting any offers [for our products].“
Compounding the problem, the industry is currently getting only 42% for their dimensional lumber compared with prices four short years ago, while diesel fuel costs have risen 250% during a similar time period.
Understandably, people are concerned and there is a natural inclination to “do something.“ The past few years have seen an increase in collaborative efforts that have brought together diverse interests, including the WildWest Institute, to find common ground on bona-fide restoration and fuel reduction projects. While much work remains to be accomplished, to date agreements have been reached on a set of statewide Restoration Principles (http://www.montanarestoration.org) and collaborative projects are under way across the state.
Unfortunately, outside of these successful and emerging collaborative efforts, there is an aggressive effort behind the scenes to “bail out” the timber industry with an ill-conceived initiative divorced from economic reality and any concept of sustainability.
Led by the Missoula Area Economic Development Corporation, this initiative is based entirely - and, up to this point, only - on a “wish list” that was put together by the timber industry.
The basic premise of MAEDC’s initiative, which in August was given to state officials, legislators and the Montana Congressional delegation, can be summed up simply: Log Baby Log. The initiative calls for “immediate action” to increase national forest logging by 330%, double state land logging and a bizarre plan for the state to seize control of a million acres of national forests, purportedly for even more logging.
But wait. There’s more. Montana taxpayers are being asked to foot the bill for timber industry exemptions from fuel taxes, discounts for vehicle registration and a taxpayer-supported program to pave log yards. One state legislator has even drafted legislation giving the entire timber industry a two-year tax holiday. Sorry, but does Plum Creek really need tax breaks paid for by hard-working Montanans?
If we are going to “bail out” the timber industry, shouldn’t Montanans at least demand that any taxpayer dollars go towards efforts that truly put the industry on a path towards economic and ecological sustainability?
For those interested in a more detailed discussion of what this path might look like, the Montana Community Development Corporation’s well-researched and well-reasoned “A New Business Plan: Moving Forest Businesses to Long Term Environmental and Economic Sustainability” should be required reading.
The WildWest Institute supports sustainable economic development in Montana and has been actively promoting some of our solutions. For example, let’s work together to ensure that every home and business built in Montana is made out of Montana wood products. After all, this would help solve some market issues, while also reducing costs - and greenhouse gases - from shipping products around the country.
Or how about collecting construction waste, which is currently dumped in our landfills, for use in high-efficiency biomass boilers? Or developing businesses that would use sustainably harvested blue-stain pine for locally made cabinets, furniture and wainscoting?
I’m confident that if we work together we will find solutions. That’s why I would encourage all Montanans to keep their eyes and ears on Helena during the upcoming legislative session. Touch base with your elected officials and demand they work together on sustainable solutions that will benefit our state’s economy, workers and environment.
Matthew Koehler is executive director of the WildWest Institute. You can learn more at: http://www.wildwestinstitute.
By Matthew Koehler on 10-24-08
Below are snips from the AP article “Lumber industry threatened by glut of unsold homes,“ which is obviously related to this article above. The entire article is available at: http://biz.yahoo.com/ap/081023/lumber_struggles.html?.v=1
Lumber industry threatened by glut of unsold homes
Thursday October 23, 2008
By Timothy R. Brown, Associated Press Writer
JACKSON, Miss. (AP)—The glut of homes in foreclosure, vacant, or stuck on the market has the nation’s lumber industry hanging on by a limb.
Since housing starts hit their peak in mid-2005, demand for lumber used in floors, home frames, and cabinets has declined sharply, and experts say the number of unsold homes would need to significantly decrease before homebuilders commit to building new ones.
Glenn Hughes, a forestry expert with the Mississippi State University Extension Service, said many loggers are faced with difficult decisions. A global economic slowdown, tight credit, and the housing bust are hitting sawmills hard and shutting down logging companies.
“Boy, surviving this downturn. I have talked to a lot of people who have been in the business for many, many, years—this is probably the roughest they have seen it,“ Hughes said.
The brutal economics of the housing crisis don’t appear to be letting up, continuing to drag down demand for both hardwood lumber, for floors and cabinets, and softwood, used in home frames.
Even if home buyers miraculously returned to the market to purchase unsold homes, Al Schuler, a research economist with the USDA Forest Service, says it may be a little too late to lift up the lumber industry because the inventory of unsold homes is “a huge number.“
“We are going to be building smaller houses. We are going to see lot more 2,000 square-foot homes rather than 5,000 square foot,“ he said.
By Matthew Koehler on 10-29-08
Below are snips from the Western Wood Products Association’s article title “U.S. Financial Crisis Will Delay Recovery of Housing, Lumber Markets until 2010”
Full article available at:
http://www.marketwatch.com/news/story/us-financial-crisis-delay-recovery/story.aspx?guid={323BF266-93C2-489B-81BF-295FFCFA16D0}&dist=hppr
PORTLAND, Ore., Oct 21, 2008 (BUSINESS WIRE)—The historic downturn in lumber demand will likely extend another year until the American financial system and housing market can be repaired, according to a new lumber supply and demand forecast from Western Wood Products Association.
According to the lumber trade association, lumber demand is expected to drop 15 percent to 44.3 billion board feet this year, then fall another 3 percent to 43 billion board feet in 2009. In just three years, demand for lumber has plummeted by some 20 billion board feet—more than what Western mills produced in all of 2005.
Housing starts are forecast to reach just 993,000 in 2008 and decline again to 933,000 next year. Since new housing typically accounts for more than 40 percent of annual lumber demand, the more than 50 percent decline in starts from 2005 has been a body blow to lumber mills.
The volume of lumber used in new home construction is expected to total 11.8 billion board feet in 2008—less than half of the 23.3 billion board feet used just two years earlier.
The WWPA forecast calls for housing markets and lumber demand to grow in 2010, but cautions that any recovery will be slow.